Alabama Legislators Consider Tuition Plan Study
The Associated Press
05/12/09 - 10:37 AM EDT
PHILLIP RAWLS
MONTGOMERY, Ala. (AP) Alabama legislators unable to agree on a bailout for the state's prepaid college tuition plan may end up seeking a detailed study of the financial problems. But the program's leader says that's not enough.
"We need a cash infusion. A resolution to study it is not going to solve anything. Tuition has got to be paid," State Treasurer Kay Ivey said Monday.
Several bills were introduced in the Legislature's 2009 session to help the financially troubled program pay tuition for the 48,000 participants. But no bill has passed both houses of the Legislature.
Workers are repairing damage at the Statehouse caused by last week's flooding, and legislators will return Thursday and Friday for their last two meeting days.
"At this point, we are unable to get a bill through the Legislature," Senate budget committee Chairman Roger Bedford, D-Russellville.
Bedford, who was sponsoring one of the bills, and other legislators say the most likely action is to pass a resolution seeking a study of the Prepaid Affordable College Tuition Program by the state pension fund. A resolution can win House and Senate approval in one day, but a bill can't.
The tuition plan's board meets May 20 in Montgomery to consider what to do about assets that equal about half of future liabilities.
The prepaid tuition program allows parents or grandparents to pay a fixed amount for a child in anticipation of getting four years of tuition at a state university upon graduation from high school. For nearly two decades, the program's board invested the money and used the earnings to pay tuition.
But stock market losses and higher-than-expected increases in tuition sliced the fund roughly in half over the past 1 1/2 years in Alabama. Some other states have frozen enrollment, redesigned their programs, or charged parents more.
The tuition plan is separate from the Alabama Higher Education 529 Fund, which allows parents to invest money for a child's college expenses.
Senate Majority Leader Zeb Little, D-Cullman, said lawmakers want to assure participants that the Legislature will solve tuition program's problems, but they need detailed financial information to devise a long-term solution. That solution doesn't have to come in the current legislative session, he said Monday
"There is no imminent danger. The funding is there for the next several years," he said.
Marc Reynolds, deputy director of the Retirement Systems of Alabama, said Gov. Bob Riley recommended the study in a meeting last week with state officials.
"We agreed that's going to be the appropriate way to go," Reynolds said Monday. He estimated the study could be done in two to four weeks.
Currently, the Retirement Systems of Alabama has nothing to do with the prepaid tuition program. It is overseen by a board headed by Ivey. But Bedford said getting the pension fund involved would add credibility to the study's results.
Bedford had sponsored a bill that would turn over the tuition program's management to the Retirement Systems, but it died without coming to a vote in the Senate.
The same thing happened to a plan offered by two Republicans, Sen. Scott Beason of Gardendale and Rep. Robert Bentley of Tuscaloosa. It would have required out-of-state college students to pay higher tuition to help Alabama's plan.
The House passed a proposed constitutional amendment by Rep. Craig Ford, D-Gadsden, that would borrow money from a state savings account to shore up the tuition program. The bill is awaiting consideration in the Senate.
Bedford said that bill lacks the support to pass. Ivey said it could pass with some modifications, and there's time to do that in the final two days.
Lt. Gov. Jim Folsom Jr., who persuaded the Legislature to create Alabama's plan 20 years ago, said he hasn't given up hope. "I remain optimistic that the body will be able to take action to address the PACT situation."
